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February 11, 2019

Wells Fargo Responds to California Class Action Suit

M Report--Radhika Ojha

Wells Fargo is addressing the claims of a class-action suit alleging that the bank has violated California's wage and vacation laws. “Wells Fargo’s compensation structure for its Home Mortgage Consultants (HMCs) complies with California’s wage and hour laws, including paying for all time worked, and allows our HMCs to earn competitive performance-based compensation,” the bank said in a statement shared with MReport.

At the crux of the matter is a lawsuit filed against Wells Fargo by James C. Kang a loan officer who worked at Wells Fargo October 2000 through May 2015 with a short break in employment in 2011. Kang alleged that while the bank paid advances on commissions at a rate of approximately $12 per hour, those advances were "clawed back" from commissions earned. He also alleged that Wells Fargo did not compensate HMCs for non-sales work, clawed back vacation pay from commissions with the result that HMCs did not actually receive their accrued vacation and that they did not pay HMCs overtime wages as required by law.

According to Bloomberg Law, the suit was admitted in California courts as a class action suit since "these allegations were based on a common compensation plan applicable to all class members, making class certification appropriate," Judge Beth Labson Freeman wrote for the U.S. District Court for the Northern District of California.

According to the suit 4,500 employees have been affected by these alleged practices and are liable for compensation. As part of his allegations and appeal to make this a class-action suit, Kang had submitted the Findings of Fact and Conclusions of Law issued in another class action involving Wells Fargo's HMCs, Ibarra v. Wells Fargo Bank, N.A., which was litigated in the Central District of California.